Rules for hospital expansions in S.C. could change

COLUMBIA — South Carolina could be changing the rules of engagement between health care facilities jockeying for patients.

That is, if the work of Palmetto State legislators and a separate certificate-of-need review panel move from words to action. Any changes to the way South Carolina regulates hospital expansions — and whether it even continues to do so — would affect the dynamics of Georgia-S.C. rivalries in Savannah and Hilton Head.

In a recent dispute, Beaufort Memorial Hospital and Savannah-based St. Joseph’s/Candler Health System had both registered their objections to the S.C. Department of Health and Environmental Control in response to Hilton Head Health System’s efforts to build a Bluffton Outpatient Center.

DHEC had then denied the Hilton Head system the certificate it had sought. An appeal followed. And this month DHEC staff was directed to go back to work with Hilton Head Health System, known also as Hilton Head Hospital, to find a resolution.

It all comes down to securing the coveted certificate of need.

South Carolina’s process was put in place to contain health care costs, prevent wasteful duplication of services, and protect hospitals from closing at the hands of niche providers cherry-picking the most lucrative services to provide.

On Tuesday a 23-member panel of state health experts will meet to discuss ways to make the CON process more efficient and less burdensome to systems trying to expand.

The S.C. Legislature is taking a more pointed look at the issue.

Last week a spillover crowd flooded a committee room where testimony was being given on a Senate bill, S. 999, which would abolish the CON program. It was introduced by Gaffney Republican Sen. Harvey Peeler, chairman of the Senate Medical Affairs Committee.

Advocates of the certificate of need requirement, including the S.C. Hospital Association, acknowledge the system’s flaws but insist that CON protects vulnerable, under-served and rural communities from finding themselves with no facilities available to them.

They argue that health care is not a typical free market where every consumer is sought after, but rather a unique market that operates with fixed-rate government reimbursement for services to the poor. What’s more, they say, hospitals are required by law to see every patient regardless of individuals’ ability to pay.

But critics of CON say that allowing state regulators to issue or deny expansion permits to hospitals is a government intrusion on the market. They say that the free market should be allowed to create the most efficient, competitive service offerings for the public, free from state politics.

A report issued by state Hospital Association in January found that South Carolina’s CON program, which began in 1971, operates alongside CON systems in Georgia, Florida and the entire Southeast.

This week’s CON meeting will start at 10 a.m. Tuesday and be held on the 18th floor of the McNair Law Firm Building in Columbia. A 30-minute public comment period will begin at 11:30 a.m.